What happens in New Hampshire obviously doesn't determine what happens in the rest of the country later in the year (Hillary Clinton did beat Barack Obama there after all). Yet from an economic point of view there's something rather gloomy about who did win last night: Donald Trump and Bernie Sanders, respectively. The problem is that both are economic populists and given the manner in which folk economics rather clashes with actual economics, this is not a good sign.

The reason why such populists are doing well is easy enough to divine--a significant portion of the American public is as mad as hell right now and they're not going to take it any more. But as I say, this doesn't generally lead to good economic policy being either proposed or enacted. The gap between what many people believe about economic matters and what is true about that same subject is too wide. Just as an example, the average person out there would regard it as entirely obvious that trade means that jobs have been shifted over to wherever they're making the stuff now. The economic answer is that this isn't true; trade will change which jobs are done in America but not the number of jobs at all.

My colleague John Zogby has the round up of all the primary news here. The general tone of the results:

Donald Trump resoundingly won the New Hampshire Republican presidential primary Tuesday night, giving the billionaire mogul his first victory in an improbable and brash campaign that already has turned American politics upside down. ....

On the Democratic side, Sen. Bernie Sanders notched a decisive win over Hillary Clinton in a state she had won in 2008. The Vermont senator’s win sets the stage for long nominating battle against the former secretary of state who is struggling to right her once-formidable campaign.

In New Hampshire, an angry populist who calls for a revolution and assails the Washington establishment, special-interest lobbyists, big-money politics, and rapacious corporations won an election in a historic move that could shake up and remake American politics.

And Bernie Sanders did, too.

That gag could be seen coming of course but fair play to them for making it. The politics of this is exactly that, and it is what spells trouble for the economics of the future. If we examine the economic policies being put forward by the various candidates we can all find a great deal of stuff that we don't like (I can actually only find one policy that I entirely and thoroughly support: Ted Cruz going to Iowa and saying, "No more ethanol!") but most of it makes various degrees of sense. Sure, you might not like the idea of a business VAT instead of corporate income tax but it is a reasonable economic idea. Reasonable here meaning that it accords with economic theory, not that it's a reasonable policy in and of itself (I think it is, sure, but realize that my opinion isn't the deciding factor here). Similarly, Hillary Clinton calls for a $12 minimum wage. I think that it should be $0 but I can see the logic of saying $12. Because, as best we know (looking at the work of Dube and perhaps Krueger for example) that's the highest it can be without starting to do significant, as opposed to some, damage to employment prospects.

The general point is that most of the other candidates have, in their economic policies, included things which are within the boundaries of the available and sensible policy space. Again, this is not to say that they're necessarily good policies, or that you or I should agree with them, but they're not obviously wrong by the standards of the usual economic theory.

At which point we come to Trump and Sanders. An examination of policies would bear more heavily on Sanders simply because he has announced more policies, Trump's basic pitch being that he knows what he's doing, so don't worry about the details. But with Bernie, well:

He will also enact a tax on Wall Street speculators who caused millions of Americans to lose their jobs, homes, and life savings.

That's the financial transactions tax--and that's just terrible policy. It will actually shrink the size of the economy, and shrink it by enough that total tax revenues will fall, meaning this is a tax which has a negative revenue. And the problem with negative revenue taxes is that you cannot then go out and buy nice things for voters with money that you don't have. This isn't to say that Wall Street shouldn't get bashed, or that things should not change; it's to say that this specific one policy is just a really, really bad idea. It's outside the bounds of good economics.